Bitcoin miners passed a significant milestone over the weekend, when they mined the 16.8 millionth bitcoin from the cryptocurrency’s planned total of 21 million coins. This means that 80 percent of all bitcoins that will be in existence have already been mined. According to estimates, bitcoin will reach its final coin figure sometime in 2140. (See also: How Does Bitcoin Mining Work?)
Over the years, bitcoin has adjusted the number of coins in circulation through a complex calibration of miner rewards and problem difficulty. Bitcoins are awarded to miners who solve complex mathematical problems through intensive computation. The reward number is halved every 210,000 blocks, per bitcoin’s original algorithm.
Immediately after bitcoin’s launch, miners earned 50 coins as reward for solving problems. It was cut to 25 in 2012 and 12.5 in 2016. In two years, miners can expect 6.25 bitcoins as rewards. The difficulty of problems has kept pace with rewards. As the number of rewards has decreased, bitcoin’s problem difficulty has increased, thereby making it more difficult and computation intensive to earn the coin. (See also: 5 Best States For Bitcoin Mining And The Worst.)
What Does This Mean For Bitcoin?
Scarcity has an important role to play in bitcoin’s price. The latter entity is expected to skyrocket as demand and scarcity increase. In December 2017, Nicholas Gregory, CEO of CommerceBlock, a provider of tools for smart contract platforms, said that high transaction fees would keep bitcoin in business even after the final coin is mined.
Transaction fees on bitcoin’s network have surged after increased media attention and interest from investors resulted in skyrocketing prices for the cryptocurrency. According to blockchain.info, miners earned $22.7 million cumulatively in transaction fees on December 21, 2017, right after bitcoin’s price briefly flirted with $20,000.
Bitcoin’s high transaction fees and scarcity have helped position the cryptocurrency as a store of value. This approach is in direct contrast to other cryptocurrencies, which are striving for low transaction fees and greater consumer traction. They have adopted other algorithms, such as Proof of Stake, in order to achieve this aim. But bitcoin remains unique as the progenitor and original cryptocurrency.
“Unlike your MP3s or digital movies, bitcoins cannot be copied, and this weekend 16.8 million of them have been mined, hoarded and a large number of them have been lost. To many cryptocurrency investors, this makes Satoshi’s invention a very valuable digital asset, unlike anything the world has ever seen,” wrote Jamie Redman, a reporter for bitcoin.com.
Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns small amounts of bitcoin. It is unclear whether he owns other bitcoin forks.